Cody Rhodes shocked the wrestling world with his revelation that he had requested and has been granted his release from WWE. Since that time, Rhodes has released a detailed statement regarding his reasoning and his grievances. In the meantime, reports have leaked indicating that WWE is displeased with the situation and, in the words of Dave Meltzer, is “putting the screws to him” by holding him to his contract.
What does this all mean from a legal standpoint? Is WWE justified in its actions? What does this mean for Cody’s future?
I begin first with a disclaimer that I do not know the specifics of Cody’s contract with WWE. There are few restrictions that apply when two parties reach an agreement with the assistance of legal counsel. Nevertheless, whether the contract was set to run for a specific duration of time or through specific number of appearances, the fact remains that his contractual arrangement with WWE had an expiration date.
Under this agreement, contracts 101 would indicate that Cody Rhodes was obligated to perform for WWE in exchange for some form of (hopefully substantial) compensation. A failure of either party to fulfill an obligation would be a breach of that agreement. Sounds fair so far.
Enter the confusion from the recent reports regarding this situation. How could WWE continue to hold Cody to the contract if it granted him his release? Again, without access to the specific contract in question, I only can make an educated guess about the likely scenario…
It has been reported that WWE “granted” Cody his release. This makes perfect sense because WWE was entitled to force Cody to maintain his end of the contractual bargain absent some provision that allowed Cody to unilaterally terminate his contract. However, doing so would have resulted in WWE being forced to maintain its end of the bargain. In other words, WWE would have been forced to continue to compensate a disgruntled and potentially volatile performer.
Ultimately, there is little doubt in my mind that WWE has in fact released Cody Rhodes from the substance of his contractual agreement. So what is to be made of the recent reports?
Knowledgeable wrestling fans are all-too-familiar with the 90-day non-compete provision that applies when WWE releases its performers. Non-compete provisions are popular in employment contracts and apparently are standard in WWE contracts. By definition, these provisions survive the actual contract itself because they will not begin to apply until after the contracted services or employment has ended. These provisions also often apply regardless of whether or not the individual is terminated or voluntarily resigns.
The provision makes perfect sense from WWE’s perspective. A 90-day period ensures that a disgruntled ex-performer will not appear on Impact Wrestling or at some other competing event to air fresh grievances. As was discussed earlier, WWE is entitled to enforce this provision even if it grants a performer his or her release.
So is this the genesis of Meltzer’s report? It is easy to imagine the enforcement of this provision being interpreted as WWE “holding Cody to his contract.” However, what about the reports that WWE is “putting the screws to Cody?” WWE has enforced this provision in the past without such reports, so what could be different in this situation?
My educated guess is that WWE performance contracts contain different non-compete provisions depending upon the manner in which a performer’s contract is terminated. In such a scenario, a 90-day non-compete would apply in the event that a performer is released or in the event that the parties mutually agree to terminate the agreement. Likewise, a lengthier period of time may apply in the event that a performer unilaterally requests to be released.
Again, this is nothing more than an educated guess. However, it is a legally permissible arrangement that could explain the current reports. It is possible that Cody initially believed that his release was mutual and that the standard non-compete period would apply. After his airing of grievances, WWE may have informed him that the release was unilateral and that the lengthier period would apply. In such a scenario, it is easy to see how WWE could be viewed as “putting the screws to Cody.”
Regardless of whether this speculation is correct, I foresee this situation resolving itself within the standard 90-day period. WWE has little interest in preventing Cody from wrestling past a 90-day window and it could be difficult to differentiate between a unilateral release and a mutual termination of the contract. Neither party wants or needs such a legal battle.
The smoke still is settling from this situation and emotions unquestionably remain high. I fully expect Ring of Honor or Impact Wrestling to be enjoying the services of a phenomenal talent by the end of summer.
